THE BUSINESS SPEED DATING EVENT
What does the World Economic Forum mean for the African small entrepreneur?
Renee Horne –London 23 May 2011
Grab a seat and read these statements, “Innovative partnerships are essential to the success of African development”, Tanzanian President Jakaya Kikwete. Former UN Secretary General, Kofi Annan added, “Governments cannot do everything, the mind-set has to change. Partnerships offer a way to different players, with differing skills and resources, to join together and create a venture that is greater in value than the sum of the parts”. Oh let’s not forget the business partners are always on hand to offer their advice. “You must first know your partner. If you want to go into a partnership, start building them among yourselves as Africans. Know the terrain. Go travel. Africans often don’t know Africa,” argues Strive Masiyiwa, Group Executive Chairman of Econet Wireless Group. Bold statements, all made at the annual World Economic Forum (WEF) this month in Cape Town, South Africa. One wonders if all these political and business heavyweights are talking about China’s ever increasing partnership with Africa or partnerships that include entrepreneurs. As part of the World Entrepreneur Society (WES) “Africa Business Voice” Series, we obtain some analysis from someone who has covered this event time and time again. Director of the Royal Africa Society, Richard Dowden, has just returned from Cape Town, and provides an exclusive interview to WES arguing that the Forum is a “Speed dating event, [all are] desperate to do business in the short time as possible”.
Clandestine Business Dealings
The theme for this year’s Forum in Africa is: ‘From vision to action – opening a new chapter on Africa’. “The meeting is set up in mind with the idea that small ideas can change the world" argues Dowden. The WEF Africa meeting in Cape Town is among the mini-events held in each region with the big one held in the Swiss city, Davos earlier this year. The WEF meetings have become the largest and most prestigious forums in the world events calendar. Indeed, WEF exerts influence in the public, private and academic sectors, but whose agenda do they push? Is WEF a club of the super-rich and influential? What exactly do they do at these meetings? What do these heavyweights do for the small entrepreneur and enterprise? Dowden argues that the forum is a “fantastic place for meeting partners, rivals, ministers; it’s surely a great networking opportunity. Political leaders usually make big announcements but on this occasion people were getting in a huddle with only people they can trust, that’s the sense I got. I'm sure there are business conversations over coffee and big deals are made then. The big stuff is away from the platform. It’s just one of those years”.
China still on the Radar
Despite long-standing commercial ties with Europe, China is an engaging notably in the continent’s development. The popular perception exists that Africa is being exploited by resource-hungry China. Dowden said that “There are a lot of Chinese small business and big corporations. They went into Africa when western countries were afraid too. So as a result you saw a revival of African economies. The Chinese also provided infrastructure but at times damage the environment”. Despite the one albeit large negative of damaging the environment, are there more positives in terms of partnering with the Chinese or the Europeans or the West? "Have you ever spotted Africans bossing Chinese workers? The big corporates in the Western world mainly have Africans in senior positions in Africa. The Chinese like to do everything themselves. On the hand Western Companies do a better job when it comes to ecological surveys, but the West comes with various terms and conditions” argues Dowden.
Is the way forward Social Entrepreneurship
Dowden argues that the meeting is not really intended for the small entrepreneur as it’s designed for the prestigious around the world; however one can argue that there were some pluses, such as the supporting of social entrepreneurship. Mirjam Schoening, Head of the Schwab Foundation for Social Entrepreneurship explains, “Social entrepreneurs are the driving force behind the innovations that improve the quality of life of individuals around the world. While the primary focus of social entrepreneurs is to make a specific change in one area - such as access to finance or affordable housing - social entrepreneurs’ approach to delivering social impact, which utilizes innovative and effective business models and cross-sector collaborations, has inspired change among governments and private sector alike. In effect, social entrepreneurs are not only delivering change to communities, they are transforming the way governments and companies serve their constituents as well.” The word from founder of the Schwab Foundation for Social Entrepreneurship, Hilde Schwab, “The next chapter for Africa requires us to look both at the tremendous opportunities for economic growth, and the challenges the continent faces in being able to tap into this growth. Social entrepreneurs, and their innovations promoting inclusive economic growth, are critical to improving the state of the world, and therefore the work we do at the World Economic Forum.”
Social Entrepreneurs tell their stories
Four leading social entrepreneurs were recognized as Regional Social Entrepreneurs of the Year for Africa at WEF. Many had incredible stories to tell, Aleke Dondo is often called the grandfather of microfinance in East Africa. He built the company Juhudi Kilimo from two of his strongest passions: microfinance and rural development. The company has provided asset financing to over 7,500 smallholder farmers, 50% of which are women. The average income of Juhudi Kilimo clients doubles or triples as a result of their loan. In addition to offering loans for rural farmers to invest in productive assets such as cows, agricultural equipment and transport, Juhudi Kilimo offers compulsory asset insurance and life insurance to the borrower at a small cost. Another case study is Olivia Van Rooyen who established Kuyasa in 1999, which helps with the housing demand in South Africa by providing short-term loans to finance incremental building and supplying a suitable mechanism through which the poor have been able to build financial and social capital through investment in housing. In South Africa the demand for housing outstrips supply, especially in cities where there is an influx of people moving to urban areas to obtain jobs. However, more than two-thirds of South Africans fall into a low-income bracket and cannot obtain credit.
Remember when violence broke out in Kenya in 2008, when it was impossible to obtain accurate and timely information? Julian Rotich was in Western Kenya at the time and founded the company Ushahidi, which means "testimony" in Swahili - a website that was initially developed to map reports of violence and peace efforts throughout the country based on reports submitted via the web and mobile phones. This website had 45,000 users in Kenya, and was the catalyst for realising there was a need for a platform based on it, which could then be used by others around the world. Subsequently, the company has grown from an ad hoc group of volunteers to a focused organisation with nearly 2 million users and 17,000,000 unique visitors. Ushahidi has strengthened democracy and economic development, such as verifying election results across Brazil, or tracking teacher absenteeism in Uganda. It has facilitated market efficiency, through mapping biogas, markets prices and production across six countries in Africa, also assisting aid workers in Haiti and Japan to reach those affected by natural disasters.
Another tale sees Evans Wadongo as a source of innovation and entrepreneurial enlightenment. In Africa where electricity is in short supply, children determined to get an education study with candles or lanterns. Wadongo grew up in a rural village in Kenya without electricity, studying at night by kerosene lantern. He used part of his university scholarship building the first Sustainable development For All (SDfA) solar lanterns from scrap materials which are easy to assemble and provide free, individualised light in remote areas. In addition, the production and distribution strategies are an operational innovation that allows this renewable energy social enterprise for users to become producers and sellers. As of 2011, 14,000 households had lanterns, with an average of 5 or more people per household using them. In the communities in which it works, secondary school drop-out rates decreased by 2% from 2007 to 2009 and poverty decreased from 62% in 2006 to 57.47% in 2009.
Indeed social entrepreneurs provide solutions to social problems. Perhaps the World Economic Forum, acknowledging their achievements, may be showing signs that the forum is transforming from exclusive to inclusive – from catering not just for the political and business heavyweights but for the broader entrepreneur society. The question follows: is such a bold statement an accurate reflection of existing reality? Have your say and join us next week for another instalment of the “Africa Business Voice series”.